Thomas Pyle: Green energy handouts hurt state

What’s the real cost of wind power? For Californians, it’s more than $330 million in handouts to big business. They paid that much money in 2012 so that multi-national corporations could experiment with wind power on the taxpayer dime – and yet nearly $200 million of that money wound up going to companies in other states.

It’s a textbook case of corporate welfare that doesn’t benefit California. The culprit is a federal program called the “Wind Production Tax Credit.” After 20 years of taking Californians’ money, once in their taxes and twice in their utility bills, the Wind PTC expired at the end of 2013. Now Congress is debating whether to renew this corporate cash cow.

But the evidence is mounting that these types of “green” and “clean energy” handouts are surprisingly dirty. According to a new report by CBS News, the federal government has lavished the green energy and technology industry with at least $150 billion in taxpayer money in recent years.

This deluge of federal funding has only resulted in a string of technological flops and business bankruptcies.

There’s no shortage of examples. Solyndra – which went bankrupt after receiving half a billion taxpayer dollars – is already well-known. Abound Solar received $400 million in 2010, then filed for bankruptcy in 2012. Fisker Automotive took $528 million from the feds in 2009 and another $392 million in 2012, then laid off 75 percent of its workforce last April. And LG Chem took $151 million in stimulus money to build an electric car battery plant where employees were paid to do nothing.

In all of these cases, poor and middle-class taxpayers came out the real losers. They paid for it once with their taxes and they will pay again with higher energy bills. The winners, though, are the millionaires and billionaires who used the taxpayers’ money to experiment with new technologies and business models. Our loss has been their experiential and monetary gain – even if the companies they founded go under.

Even where it hasn’t fizzled, green energy’s economic impact hasn’t been that bright. According to a comprehensive study recently released by a team of Spanish academics, each new “green job” costs the rest of the economy 2.2 other jobs because of the necessary subsidies. More damning is their finding that each “green” megawatt of energy destroys an average of over 5 jobs, with each solar-powered megawatt eliminating nearly 9 jobs and each wind-powered megawatt costing over 4 jobs.

These perverse trade-offs can be laid at the feet of government energy subsidies. Whether it’s $150 or $150 billion, the government’s financial intervention distorts the economy by shifting investment from proven job creators to expensive experiments that – as Solyndra and others demonstrate – don’t always pan out.

The Spanish study bears directly on America’s experience because many of our country’s green-job initiatives are based on the Spanish model. In fact, President Obama has specifically praised Spain’s green-job experiments on numerous occasions, labeling theirs a system worth emulating.

All of this information directly bears on the question of Wind PTC and California. This handout gives wind electricity producers a lucrative taxpayer funded subsidy of 50 to 75 percent of wind’s wholesale electricity costs.

Even then, electricity from new wind facilities still costs at least 30 percent more than conventionally generated electricity, according to the Department of Energy.

The Wind PTC is thus a microcosm of the problems inherent in the green-energy industry. Like other taxpayer-funded “green” initiatives, renewing it would only worsen the negative effects that such subsidies have already had on job creation and economic growth, while enabling green-job billionaires to continue their experiments with Californians’ money.

There’s nothing clean about perpetuating such a system. Thomas Pyle is the president of the American Energy Alliance.

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